Burger King's plan to acquire the coffee and doughnuts chain Tim Hortons and move its corporate headquarters to Canada is simply a bid to diversify amid a declining hamburger business, says economist Peter Morici, a professor at the University of Maryland.
"As you know, the hamburger businesses have declined in the United States, not because McDonald's or Burger King are not doing a good job, but the millennial don't go for them the way our generation did," Morici told Rick Ungar, guest host of "The Steve Malzberg Show" Friday on
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"Burger King wants to use its extensive cash flow to build out other franchises. Tim Hortons is in Canada. It's a very effective franchise like our Dunkin' Donuts, but it's largely limited to Canada.
"They haven't been good in internationalizing so that's a great opportunity. Burger King is in 100 countries, it knows the ropes and it can take it around the world. Then, the question comes up: why locate the new entity in Canada? Simple. We have lousy tax laws that would tax all those overseas operations."
Morici said President Barack Obama should do more to try to knock down the oppressive 35 percent corporate tax rate.
"He's been in office five years. The Republicans want to reform the system, level out the rates and lower them. He's not interested," Morici said.
"In fact, he wants more revenue and presidents have a lot of discretion with the corporate income tax."